Despite the initial benefit from treating ERBB2-positive breast cancer with tyrosine kinase inhibitor lapatinib, resistance develops inevitably. Since the expression of protein tyrosine phosphatase receptor-type O (PTPRO), a member of the R3 subfamily of receptor protein tyrosine phosphatases (PTPs), is inversely correlated with the aggressiveness of multiple malignancies, we decided to explore the correlation between PTPRO and lapatinib resistance in ERBB2-positive breast cancer. Results of immunohistochemical (IHC) staining and the correlation analysis between the expression levels of PTPRO and the clinicopathological parameters indicate that PTPRO is downregulated in cancer tissues as compared with normal tissues and negatively associated with differentiation, tumor size, tumor depth, as well as the expression of ERBB2 and Ki67. Results from Kaplan-Meier analyses indicate that lower expression of PTPRO is correlated with shorter relapse-free survival for patients with ERBB2-positive breast cancer, and multivariable Cox regression analysis found that PTPRO can potentially serve as an independent prognostic indicator for ERBB2-positive breast cancer. Results from both human breast cancer cells with PTPRO knockdown or overexpression and mouse embryonic fibroblasts (MEFs) which derived from Ptpro +/+ and Ptpro -/- mice with then stably transfected plasmid FUGW-Erbb2 consistently demonstrated the essentiality of PTPRO in the lapatinib-mediated anticancer process. Our findings suggest that PTPRO is not only able to serve as an independent prognostic indicator, but upregulating PTPRO can also reverse the lapatinib resistance of ERBB2-positive breast cancer.